A 4 per cent ceiling on rent increases in Dublin and Cork, with other cities and commuter counties to follow, will be introduced next year after Fianna Fáil withdrew most of its objections to a package of measures published earlier this week by Minister for Housing Simon Coveney.
However, officials had to scramble to salvage the legislation on Thursday night after Sinn Féin spotted a drafting error that would have allowed annual increases of up to 8 per cent.
The Government was forced to table an emergency amendment to the legislation to correct the mistake.
The last-minute hiccup came after a tense few days in Leinster House. Relations between Fine Gael and Fianna Fáil were greatly strained by the dispute over the rent strategy before an agreement was reached on Thursday afternoon.
Fine Gael TDs were pleased at what they perceived to be a victory over Fianna Fáil, while senior figures in Fianna Fáil said that the events of recent days had breached trust between the two parties.
Major coup
The move is seen as a major coup for Mr Coveney, after he faced down Fianna Fáil demands to alter the terms of the package. Fianna Fáil sought that the 4 per cent rent increase ceiling be reduced to 2 per cent and also argued for tax incentives for landlords.
The Fianna Fáil housing spokesman, Barry Cowen, also wanted the geographical scope of the rent controls to be extended, an issue on which Mr Coveney ceded some ground, promising an early review to include Limerick, Galway and Waterford, as well as counties around Dublin that are home to thousands of commuters.
Fianna Fáil will now abstain on the legislation to give effect to the measures, allowing it to pass in the Dáil on Friday, after TDs sat late last night debating the Bill.
TDs will first have to vote on the amendment to correct the drafting mistake, highlighted by Sinn Féin TD Eoin Ó Broin, which would have provided for an annual increase of twice the intended limit of 4 per cent.
Opposition TDs last night disputed that the Government's amendment would have the desired effect, with Labour TD Jan O'Sullivan accusing the Government of "making it up as you go along".
Sources in Leinster House say there is likely to be fallout between the two big parties after a difficult week.
Lack of consultation
Fianna Fáil sources say that Fine Gael was guilty of an abuse of the confidence and supply arrangement by not consulting with them before the strategy was published.
Mr Cowen said the dispute would not have taken place if Mr Coveney had consulted him prior to the publication of the strategy.
However, Fine Gael TDs rejected the charges and said that, while Fianna Fáil had an input into legislation, the Government had to be allowed to govern and to legislate. The Minister for Housing received strong support from his Fine Gael colleagues after he refused to budge on the 4 per cent rent cap.
Mr Coveney, who was supported by the Taoiseach, insisted to Fianna Fáil he would under no circumstances alter that rate, pledging to withdraw the legislation rather than make the changes Fianna Fáil wanted.
This put Fianna Fáil in a position where it feared being blamed if the legislation fell or was delayed. Agreement was eventually reached after a series of discussions between Mr Cowen and Mr Coveney.
